Sri Lanka Labor Situation Remains Unsettled

Settlement of a wage agreement with striking tea workers in Sri Lanka is not sticking. Employers proclaimed the 40 percent increase a significant step given economic constraints but protestors continue to demonstrate in Colombo on behalf of workers. Religious leaders and others not affiliated with the tea industry, known as the "Thousand Movement", continue to press union leaders not to sign the collective bargaining agreement. A seven-day strike begun in December ebbed during January but late in the month several thousand workers resumed protests at the Hatton and Bogawantalawa tea estates demanding a basic daily wage of 1000 Sri Lanka rupees (LKR) per day, despite an agreement with plantation management reached Jan. 25 setting rates at LKR 750 (at current exchange rates LKR 1000 is equal to $5.50 per day). Protestors (video) are demanding unions press the Employers’ Federation of Ceylon (EFC) for an additional LKR 250 per day in wages. According to UCA News, "Sri Lanka's tea exports and auctions have been badly affected by the estate workers' strike and the constitutional crisis that struck the country last October. The tea companies say they lost LKR 240 million a day during the strike or LKR 1.75 billion ($24.5 million) overall — losses they used to justify rejecting the demands to boost the minimum wage to 1,000 rupees a day." The protests follow a nationwide gathering Jan. 23 when several hundred thousand union members and activists held peaceful demonstrations in 30 cities. Workers in the Nuwara Eliya region halted traffic on the main roads and closed a bridge to isolate the Bogawantalawa, a small town in the Central province of Sri Lanka, 150 kilometers from Colombo. BPL (Bogawantalawa Plantations Ltd.) and its Walters Bay brand is the largest Sri Lanka supplier of iced tea to the U.S. There are 1 million tea workers in Sri Lanka (4.5 percent of the country’s population). The agreement follows months of stalled negotiations. It calls for a base rate of LKR 700 plus LKR 50 per day allowance based on output. Tea workers in Sri Lanka are organized into several labor unions and while the Estate Workers Union (EWU) and the EFC appear ready to sign, it is less certain that the Jathika Estate Workers’ Union (LJEWU) will agree. P. Digambaram, leader and parliamentarian of the National Union of Workers (NUW) said he supports the agreement, citing concerns about weakened pricing and lower production in 2018. Tea is the second largest source of foreign currency, with exports contributing $1.5 billion annually. Sri Lanka formerly harvested 328-340 million kilograms annually (2010-2015) but flooding, changing climate and labor difficulties lowered yields to 307 million kilograms in 2017 and an estimated 303 million kilograms in 2018. Sri Lanka has set a goal of 320 million kilograms in 2019 equivalent to about 20 percent of global tea exports. Labor unions are closely aligned with political parties in Sri Lanka and 2019 is an election year. Ceylon Workers’ Congress (CWC) leader M.P. Arumugam Thondaman “has promised to make a request from Sri Lanka President Sirisena to increase the daily wage of estate workers to LKR 1000,” according to a report in the Daily Mirror. The government has proposed a base rate to rise over three years with allowances for plucked leaf that exceed the average 18 kilograms to equal LKR 1000. Workers are seeking a flat LKR 1000 per day for plucking 16-18 kilograms of tea leaves.

Negotiations stalled in October when unions rejected a 20 percent increase. Estate owners were firm at LRK 600. Workers began striking Dec. 6, seeking a $5.50 minimum daily wage. Those affiliated with the Ceylon Workers Congress (CWC) called off the strike a week later during a constitutional crisis involving the president and prime minister. The crisis was resolved by the Supreme Court, but tensions remain high. Protests increased in January culminating in the Jan. 23 nationwide demonstrations. Economists at the University of Peradeniya estimate a tea worker needs to earn $152 per month to meet his or her basic needs. On average, tea workers receive $44 per month (LKR 8000). Workers are seeking LKR 1000 per day, which is LKR 20,000 or $110 per month for 20 days work. A decade ago workers received LKR 290 per day. They unsuccessfully pursued a raise to LKR 500 per day, equivalent to $4 in 2009 dollars. The rupee has since depreciated to the point that $4 today is equal to LKR 725. Workers did not a achieve a daily average of LRK 500 until 2016. As a result, the number of workers in poverty has increased even though overall poverty levels in Sri Lanka have declined. Minister of Plantation Industries Navin Dissanayake said he is willing to grant LKR 100 million in back wages for workers when the agreements are signed. Sources: Daily Mirror, Global Voices,